Short-term interest rate prospects

King_Weasel

I can get 3% instant access with Lloyds Vantage. If I tie up some cash for a year I can up the rate to 3.6% with Yorkshire. I don't want to commit for longer.

What are the chances some better rates are in the wings? For instance, will the end of the ISA year produce some more enticing offers? I already make full use of regular savings offers, btw.

Any views? Anyone with guaranteed stratospheric returns from gold mine bonds or whatever please start your own thread.

Thrugelmir

We have utilised one of our ISA allowances every year by investing in 4 or 5 year fixed terms. That way we obtain a good rate of return. Every year now we have at least one maturing that we can roll over again for a similar period or leave on short term rates.

All depends what you have the money earmarked for.

opinions4u

Savings rates are edging up at the moment.

AA at 3.20% for easy access looks a good starting point.

hermante

King_Weasel wrote: »

I can get 3% instant access with Lloyds Vantage. If I tie up some cash for a year I can up the rate to 3.6% with Yorkshire. I don't want to commit for longer.

To get the same return as the 1-year fixed rate, you would need to get a rate of 4.2% in 6 months' time (3% for 6 months and 4.2% for 6 months), or 3.8% in 3 months' time. Do you think that's going to happen?

I think there will be some ISA offers in March though

jimjames

I think it is unlikely that base rates will rise in the next 12 months. As such it also seems unlikely that savings rates will be massively different in that time.

opinions4u

jimjames wrote: »

I think it is unlikely that base rates will rise in the next 12 months. As such it also seems unlikely that savings rates will be massively different in that time.

I aree with you on base rate. Indeed, if anything, it could even fall.

But the pressure on bank balance sheets is growing again as the pressure on the Euro becomes more intense.

This will mean increases in the cost of wholesale funding and in many cases it will lead to banks offering better savings rates.

That said, I wouldn't expect to see anything up by more than 0.5% as a result of this.

King_Weasel

Thanks for your replies. Given the margin of the 1-yr fixed rate is only 0.4% above the best instant access I think I will open the AA instant access a/c for now in case a higher 1-yr rate turns up.

(Can't tie it up for longer as the credit card company will want the money back - unless another card is kind enough to make me a further advance.)